Lesson: Simple Interest

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Lesson Objective

calculate simple interest

Lesson Plan

Aim/Objective:

Key Points

Calculate simple interest

·         Interest - is an amount that you pay in order to use or borrow money or the amount earned on top of money that you invest.

·         Principal - is the amount of money you borrow or invest

·         Interest Rate - is the rate of interest paid over a given period of time, usually one year

Assessment:

Lesson

·         _interest_is an amount that you pay in order to use or borrow money or the amount earned on top of money that you invest.

·         Principal __ is the amount of money you borrow or invest.

·         __interest rate_ is the rate of interest paid over a given period of time, usually one year

Notes:

Walk through examples/notes with students.

First you will be given three pieces of information – the principal, interest and time.  Now we can find the amount of interest by following the three steps:

·         There are three steps to finding interest.  Let’s look at the following example:

Principal:  \$450                Interest Rate:  4.9%            Time:  6 months

·         Step 1:  Use the Interest Formula.  Fill in the information that you are given.

I =  p x r x t

 Interest (I) = Principal (p) x Rate (r) x Time (t) I = \$450 x 4.9% x 6 months

Change the numbers so you can calculate

§  4.9% = 0.049

§  6 months =  =  year = 0.5

 I = \$450 x 0.049 x 0.5

Step 2:  Multiply to find the interest

 I = \$450 x 0.049 x 0.5 I = \$22.05 x 0.5 = \$11.025

o   Step 3:  Add to find the principal plus the interest

 \$450 + \$11.03 = \$461.03

Guided Practice

Walk through examples with students for finding interest

Find the simple interest and the sum of the principal and the interest for each.

 Principal Interest Rate Time Interest Principal + Interest 1.      \$598 6.6% 1 yr 2.      \$225 4.2% 1 yr 3.      \$1,560 5.0% 6 mo 4.      \$209 7.1% 3 mo 5.      \$10,000 4.75% 9 mo

Lesson Resources

 Simple Interest HW 2,154 Simple Interest CW 1,655 Simple Interest Notes 2,028